Gold prices declined by Rs 315 to Rs 31,500 per ten gram, while silver lost Rs 850 to Rs 48,000 per kg on reduced offtake.

Traders said heavy selling by stockists, triggered by a weak global trend, led to the fall in prices of gold and silver. Sentiments were also affected by the speculation that a recovering US economy will spur the Federal Reserve to taper, reducing demand for the metals as an alternative investment.

Gold in New York, which normally sets price trend on the domestic front, plunged by USD 15.70, or 1.22 percent, to USD 1266.20 an ounce and silver by 3.04 percent to USD 20.70 an ounce last night.

Besides, sluggish demand at prevailing higher levels further dampened the sentiment. On the domestic front, gold of 99.9 and 99.5 percent purity tumbled by Rs 315 each to Rs 31,500 and Rs 31,300 per ten gram, respectively. It had surged by Rs 915 on Tuesday.

Sovereign, however, held steady at Rs 25,200 per piece of eight gram in limited deals. Silver ready dropped by Rs 850 to Rs 48,000 per kg and weekly-based delivery by Rs 740 to Rs 47,310 per kg. The white metal had shed Rs 160 in last trade.

Silver coins also nosedived by Rs 1,000 to Rs 85,000 for buying and Rs 86,000 for selling of 100 pieces.